Law No. 13 of 2016 Regulating Commercial Agencies

Law No. 13 of 2016
Regulating Commercial Agencies

Article 1

For the purposes of applying the provisions of this Law, a commercial agency means any agreement under which the holder of the legal right entrusts a trader or a company in the State with selling, promoting or distributing goods or products, or providing services, in its capacity as agent, distributor, franchisee or licensee of the producer or the original supplier, in return for a profit or commission.

Article 2

Subject to the rules on commercial agencies contained in Law No. (68) of 1980 referred to above, a principal may have more than one agent and distributor.
Whoever engages in commercial agency business shall satisfy the following conditions:
1- Be a natural person or a group of natural persons holding Kuwaiti nationality, or be a juristic person, provided that the share of the Kuwaiti partner in its capital is not less than 51%.
2- Be registered in the Commercial Register.
3- Be licensed to engage in the activity covered by the agency.
4- Be bound to the principal by a direct agency contract, or bound to whoever holds the legal right to represent the principal.

Article 3

The commercial agency contract shall contain the following particulars:
1- The name of the agent or distributor, and the name and nationality of the principal.
2- The goods, products or services covered by the contract.
3- The rights and obligations of each of the principal and the agent or distributor, and the extent of the principal’s liability for the obligations of the agent within the scope of its representation of the principal.
4- The territory of the agent or distributor.
5- The term of the agency and the manner of its renewal.
6- The manner of termination and expiry of the agency.
7- Any other conditions agreed upon between the principal and the agent or distributor that do not conflict with the provisions of this Law.

Article 4

The importation or provision of any goods or product shall not be confined to its agent or distributor, even if the agent or distributor is exclusive, and even if the agency includes the right to use the trademark, provided that whoever imports or provides them satisfies the conditions and provisions of this Law and its Executive Regulations.
In all cases, the goods imported or provided shall satisfy the conditions and the international and Gulf standard specifications approved in the State of Kuwait, as well as the conditions of the manufacturer’s warranty to which the agent is committed, and reciprocity shall apply to the agents and distributors of the same goods and products in the States of the Gulf Cooperation Council.

Article 5

The agent or distributor of goods and products shall provide – where they are imported by a third party – the maintenance and repair services that it provides for the goods it markets in Kuwait, where the producer or the principal agrees to warrant such goods and products and the services they require, provided that the goods or product imported by the third party are of the same type as the goods and products marketed by the agent or distributor in Kuwait, that such goods satisfy the international quality conditions and standards and their Gulf specifications, and that they are free from any manufacturing defects.
These services shall include providing spare parts for the goods and products referred to in the preceding paragraph, as well as providing maintenance for them on the same warranty terms, without charging any increase over the prices offered to the agent’s customers.

Article 6

The Commercial Agencies Register existing at the Ministry of Commerce and Industry shall continue in operation, and all commercial agencies accepted in accordance with the provisions of this Law shall be registered therein.
No commercial agency that is not registered in this Register shall be recognised, and no action shall be heard in respect thereof.

Article 7

The agent or distributor in a commercial agency shall apply for its registration in the Commercial Agencies Register on the form prepared for that purpose.
The Ministry of Commerce and Industry shall decide on the application submitted to it for the registration of the commercial agency within thirty days from the date of its submission on the form prepared for that purpose; otherwise, the application shall be deemed rejected. The Ministry shall grant the agent whose application is accepted a certificate evidencing the registration of the agency in the register prepared for that purpose.
The person whose application is accepted shall announce in the Official Gazette the registration of the agency and all material particulars relating to it, and shall in addition announce it in two daily newspapers if the producer or the goods have another registered agent, within two weeks from the date of registration of the agency; otherwise, its registration shall be suspended until the announcement is made.

Article 8

The Ministry of Commerce and Industry may, by a reasoned decision, reject an application for the registration of a commercial agency, and shall notify the person concerned by sending him a copy of the decision by registered letter with acknowledgement of receipt, or by any other means by which notification is achieved.
Any person whose application is rejected, or is not decided upon within thirty days in accordance with the preceding Article, may challenge the decision before the competent court within sixty days from the date of being notified of the rejection, or from the date of expiry of the said period.

Article 9

Subject to the provisions on commercial agencies in the Kuwaiti Commercial Code, an agency may be re-registered in the Commercial Agencies Register in the name of a new agent in the following cases:
a- If the previously registered agency has been terminated by mutual consent of its parties.
b- If the previously registered agency has been cancelled by an enforceable court judgment.
c- If the term of the previously registered agency specified in the agency contract has expired.
The principal may not terminate the contract without a breach of it by the agent; otherwise, the principal shall be obliged to compensate the agent for the damage it has sustained as a result of such termination, and any agreement to the contrary shall be void.

Article 10

The agent or distributor, as the case may be, shall:
1- Provide, on a permanent basis and in sufficient quantity, the goods, products or services required by its agency, and likewise the spare parts for the goods that require them, provided that they continue to be available in the country of production.
2- Provide the workshops necessary for the maintenance and repair required by the goods subject of the agency, and provide all the guarantees offered by the producers, taking into account the standard specifications of the State.
3- Retain the documents showing the prices of the goods from their sources, in addition to the documents of their insurance, shipping, transport and customs duties, provided that the Executive Regulations shall specify the undocumented expenses.
In the event of expiry of the agency, the said obligations of the agent or distributor shall continue for six months from the date of its expiry, or until a new agent or distributor is appointed, whichever is earlier.

Article 11

The agent or distributor may appoint a manager to manage its agency, and shall notify the Ministry of Commerce and Industry of the name of such manager within three months from the date of the appointment, by registered letter.
Without prejudice to the liability of the agent or distributor, the manager of the commercial agency shall be liable for every act committed by him in violation of the provisions of this Law.

Article 12

Any interested party may obtain from the Ministry of Commerce and Industry extracts from the registration entry in the Commercial Agencies Register, and, in the absence of registration, shall be given a certificate to that effect.

Article 13

The Minister of Commerce and Industry shall issue a regulation specifying the amount of the fees due for the implementation of this Law.

Article 14

The agent or distributor, or its representative or heirs, as well as the manager of the agent or distributor company, shall submit to the Ministry an application to strike off the registration of the agency from the Commercial Agencies Register within three months from the date of expiry of the agency for any reason whatsoever, or from the date on which the agent or distributor ceases to satisfy any of the conditions set out in Article (2) of this Law, provided that such application is accompanied by the supporting documents.
Upon any change or amendment to the particulars of the agency, the persons referred to in the first paragraph shall apply for the annotation thereof in the said register within three months from the date of the change or amendment.

Article 15

Whoever states in correspondence or printed matter relating to the business of its commercial agency, or publishes by any means of publication, that it is an agent for a company or for products, materials, goods, merchandise or services, without being an agent registered in the Commercial Agencies Register, shall be punished by a fine of not less than five thousand dinars and not more than ten thousand dinars.
In the event of recidivism, the punishment shall be a fine of not less than ten thousand dinars and not more than twenty thousand dinars.
The court may order the closure of the shop in which the violation occurred for a period not exceeding three months, or the cancellation of the licence and the permanent closure of the shop, and a sign containing the operative part of the judgment ordering the closure of the shop shall be conspicuously posted on the door of the shop.

Article 16

The same penalty provided for in Article (15) shall apply to whoever submits to the competent authority or to any other official authority information or data that he knows to be incorrect in connection with the registration of the agency in the Commercial Agencies Register, its striking off, or the amendment of its particulars, and the court shall, of its own motion, order the correction of such data in accordance with the procedures and within the time limits it specifies.

Article 17

Without prejudice to any more severe penalty provided for by any other law, whoever violates the provisions of Clauses (1) and (2) of Article (10) of this Law shall be punished by a fine of not less than one thousand dinars and not more than two thousand dinars, in addition to his obligation to pay compensation in accordance with the rules of civil liability where necessary.
Whoever violates the provisions of Article (14) of this Law shall also be punished by a fine of not less than five hundred dinars and not exceeding five thousand dinars.

Article 18

The employees appointed by a decision of the Minister of Commerce and Industry to monitor the implementation of the provisions of this Law and of the decisions issued in implementation thereof shall have the capacity of judicial police officers, and to that end shall have the right to enter and inspect shops and establishments, to examine their documents and records, and to draw up reports recording violations of this Law, and they shall maintain the confidentiality of the information they access by virtue of their duties.
The Executive Regulations shall regulate the manner of carrying out the work and procedures of judicial police powers.

Article 19

The Public Prosecution shall undertake the investigation, disposition and prosecution of the offences committed in violation of the provisions of this Law.

Article 20

The courts of Kuwait shall have jurisdiction over all lawsuits arising from the application of this Law, and recourse to arbitration may be agreed upon for the settlement of disputes.

Article 21

The Minister of Commerce and Industry shall issue the Executive Regulations and the decisions implementing this Law within six months from the date of publication of the Law in the Official Gazette.

Article 22

Law No. (36) of 1964 referred to above is hereby repealed.

Article 23

The Prime Minister and the Ministers, each within his competence, shall implement this Law, which shall come into force from the date of its publication in the Official Gazette.

Issued on 6 March 2016 and published in the Official Gazette Kuwait Al-Youm on 13 March 2016.